A CCRC capital stack typically combines tax-exempt bonds (rated and non-rated), HUD 232 mortgage insurance on the AL/ SNF components, bank construction or working-capital lines, and entrance- fee revenue. Underwriting depends on entrance-fee model (Type A/B/C), operator quality, and campus-level coverage. Bond rating drives all-in cost.
CCRC capital stack and entrance-fee underwriting
Campus structure: a CCRC offers IL plus AL plus MC and sometimes SNF on one campus. Resident contracts include entrance fee (refundable in part, often 50%-90%) plus monthly service fee. Lifetime-care contracts (Type A) bundle all care levels at fixed monthly fee; modified contracts (Type B/C) charge for higher care levels as needed.
HUD 232 layer: the AL and SNF components can be HUD 232 financed independently of the bond stack. HUD 232 provides 35-year fixed-rate non-recourse on the licensed-care portion; this lowers the all-in cost compared to bond-only structure.
Bank financing: bank construction and working-capital lines fund interim cash needs (entrance-fee receivable financing during fill-up, capex). Bank lines typically priced wide of bonds because bank tenor doesn't match the long-duration entrance-fee model.
Entrance-fee revenue: the central economics of a CCRC. New residents pay entrance fees that fund construction, retire bonds, or build endowments. Refundable entrance fees create a contingent liability that lenders model carefully.
Sponsor playbook: assemble bond underwriter, HUD 232 lender, and bank lender in parallel. Coordinate underwriting timelines. Engage CCRC-specialized counsel and feasibility consultant from kickoff because the structure is complex.
Sources
- Senior Housing Quarterly Data · National Investment Center for Seniors Housing & Care (NIC) · 2026-Q1
- Section 232 LEAN Healthcare Mortgage Insurance Program · U.S. Department of Housing and Urban Development · current
- Nursing Home Data Compendium · U.S. Centers for Medicare & Medicaid Services (CMS) · 2025